Wednesday, March 20, 2013
Web Piracy Does Not Affect Music Sales, Study Says

A report published by the European Commission Joint Research Centre claims that music web piracy does not harm legitimate sales.

The Institute for Prospective Technological Studies examined the
online habits of 16,000 Europeans. They researchers estimated
the effects of illegal downloading and legal streaming on the legal
purchases of digital music. The results suggest that Internet users
do not view illegal downloading as a substitute to legal digital
music. Although positive and signiﬁcant, the estimated elasticities
are essentially zero: a 10% increase in clicks on illegal
downloading websites leads to a 0.2% increase in clicks on legal
purchases websites. Online music streaming services are found to
have a somewhat larger (but still small) effect on the purchases of
digital sound recordings, suggesting complementarities between
these two modes of music consumption. According to the results, a
10% increase inclicks on legal streaming websites lead to up to a
0.7% increase in clicks on legal digital pur-chases websites.

The International Federation of the Phonographic Industry (IFPI)
said the research was "flawed and misleading".

"The findings seem disconnected from
commercial reality, are based on a limited view of the market and
are contradicted by a large
volume of alternative third part
y research that confirms the negative impact of piracy on the
legitimate music business," IFPI said in a statement.

"If a large proportion of illegal downloaders do not buy any music
(and yet consume, in some cases, large amounts of it), it cannot be
logical that illegal behaviour stimulates legal download sales and
inflicts no harm."